THE country’s office demand this year has surpassed demand for 2020 and 2021 combined, according to a study of Leechiu Property Consultants.
Office demand for this year reached 975,000 square meters, surpassing the combined demand of 2020 at 389,000 square meters and 2021 at 540,000 square meters.
The back office sector accounted for the lion’s share of 2022 take-up at 466,000 square meters despite the dominance of the hybrid set-up which allowed some employees to work from home and the rest, on site.
Traditional office occupiers also registered a substantial take-up of 448,000 square meters after many companies mandated the onsite presence of their employees.
“Up to mid-2022, it was difficult to visualize year-end demand hitting close to the 1 million sq m mark. The results have exceeded expectations but we can’t put our guard down just yet,” company CEO David Leechiu said.
From only 124,000 square meters in the first quarter highlighted by widespread infections of the Omicron variant of Covid-19, office demand peaked in the third quarter at 313,000 square meters after political and other uncertainties were resolved by the May presidential elections.
Take-up leveled off in the fourth quarter and reached 283,000 square meters but with growth likely to continue in 2023 given a notable live requirement of 352,000 square meters.
Live requirements are office transactions in various stages of completion.
The sustained demand for office spaces is tempered by significant vacancies in some business districts and additional supply from newly buildings to be completed in 2023.
“We thus will start the new year cautiously optimistic about the prospects of the real estate industry in the next 12 months,” said Leechiu.
Metro Manila accounted for 724,000 square meters or around 70 percent, with Bonifacio Global City taking up 232,000 square meters and Makati at 198,000 square meters. Cebu City took up 92,000 square meters, followed by Davao at 50,000 square meters and Clark at 49,000 square meters.
Mikko Barranda, LPC director for Commercial Leasing, said that the IT-BPM sector, the largest Philippine employer, hired an additional 265,000 employees in the last three pandemic years. In 2021 and 2022 alone, 120,000 employees were recruited annually. Nevertheless, IT-BPM office demand only surged from 2021 to 2022 by 68 percent due to majority of the employees returning onsite for work.